Wall Street was bracing for losses Monday, as stock-market investors grew increasingly nervous ahead of the first U.S. presidential debate and gains for oil prices evaporated ahead of an important meeting of major global producers.
Dow Jones Industrial Average futures YMZ6, -0.52% fell 91 points, or 0.5%, to 18,099, while S&P 500 index futures ESZ6, -0.51% dropped 10.10 points, or 0.5%, to 2,148.25. Nasdaq-100 NQZ6, -0.61% lost 28.25 points, or 0.6%, to 4,828.25.
Stocks finished lower on Friday, though indexes posted a second-straight weekly gain, as investors took a hit from a renewed slide in oil prices. The S&P 500 index SPX, -0.57% declined 0.6%, with a loss of 1.3% for the energy sector.
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Losses looked set to resume Monday, with U.S. stock futures tumbling and Asian and European markets both in the grip of selling. Part of the selloff was due to oil prices, which wobbled Monday as investors questioned whether the Organization of the Petroleum Exporting Countries and other big non-cartel members such as Russia will make progress on a deal to limit production. The producers will meet on the sidelines of an energy conference in Algeria Wednesday.
U.S. crude futures CLZ6, +0.69% were last up 15 cents to $ 44.63a barrel.
Presidential debate worries: Aside from oil, politics were playing a big role in rattling investors ahead of Monday’s U.S. presidential debate between Democratic nominee Hillary Clinton and her Republican rival, businessman Donald Trump.
“[Monday], we’ll get the first TV debate, and while it’ll be too early to conclude too much from it (remember Obama’s dreadful performance in his first debate with Romney), if the probability of a Trump victory increases in coming weeks, then you need to start questioning the Fed’s intentions for December, and you’ll want to reduce your exposure to, particularly, U.S. equities and the dollar,” said Erik F. Nielsen, group chief economist at UniCredit Research, in a note to clients.
Nielsen said that he is “amazed” that markets are not more unsettled by opinion polls showing the election outcome remains difficult to guess.
Economic docket: On the data front, new-home sales for August will be released at 10 a.m. Eastern Time.
As for speakers, Federal Reserve Governor Daniel Tarullo will give a speech on the “next steps in the evolution of stress testing” at Yale School of Management Leaders Forum in New Haven, Conn. at 11:45 a.m. Eastern. A short while later, Dallas Fed President Rob Kaplan will appear in a moderated question and answer session at 1:30 p.m. Eastern.
Stocks to watch: Shares of Chemtura Corp. CHMT, +2.29% rose 18% in thin, premarket trade after German specialty chemical company Lanxess AG LXS, +7.94% LXS, +8.36% said it plans to buy the Philadelphia-based rival in a deal with an enterprise value of around $ 2.7 billion.
Twitter Inc. shares TWTR, +21.42% were off 1.4% in thin premarket action, after last week’s report that the online social media provider was talking with a number of potential suitors, including Salesforce.com Inc. CRM, -5.63%
Other markets: Some Asian markets closed with sizable losses on Monday, with the Nikkei 225 index NIK, -1.25% dropping 1.2% as the Japanese yen USDJPY, -0.52% pushed higher against the U.S. dollar. The dollar last traded at ¥100.65, against ¥101 seen late Friday in New York.
Bank of Japan Governor Haruhiko Kuroda said Monday that there’s “no limit to monetary policy” in his first speech since last week’s decision by the Japanese central bank to overhaul its stimulus program. He said the BOJ would use “every possible policy tool” to get to its 2% inflation goal, according to media reports.
Bank stocks led the Stoxx Europe 600 index SXXP, -1.37% down 1.4%, as Deutsche Bank DBK, -5.46% DB, -1.92% dropped 5.8% on a report that German Chancellor Angela Merkel doesn’t support potential aid for the bank.
Gold prices GCZ6, -0.10% fell $ 3.60, or 0.3%, to $ 1.338.10 an ounce.